Explain the principles of insurance in d | Class 11 Business Studies Chapter Business Services, Business Services NCERT Solutions

Question:

Explain the principles of insurance in detail.

Answer:

Insurance operates on the following principles:

Utmost Good Faith: Both parties must disclose all relevant information truthfully.
Insurable Interest: The policyholder must have a financial stake in the insured item or person.
Indemnity: Compensation is provided only to the extent of the actual loss, preventing profit from claims.
Proximate Cause: Compensation depends on whether the insured peril caused the loss directly.
Subrogation: After compensation, the insurer gains rights to the damaged property.
Contribution: If multiple policies cover the same risk, insurers share the compensation cost.
Mitigation: The insured must take reasonable steps to prevent or minimize losses.

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Welcome to the NCERT Solutions for Class 11 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Extra Questions, Question 7: Explain the principles of insurance in detail.....

Explain the principles of insurance in d | Class 11 Business Studies Chapter Business Services, Business Services NCERT Solutions

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